The Federal Reserve rate cuts have sent the market up, but some stocks are rising more than others. That includes small pharmaceutical companies like Wave Life Sciences (NASDAQ: WVE), whose shares rose 9% the day after the central bank reduced rates by 50 basis points.
However, rate cuts are not the only reason for excitement around the company. The average of recent Wall Street analyst price targets signals an 85% upside potential in the stock. I'll analyze the progress Wave Life Sciences has made in its treatment, its financial situation, and what to watch for next.
Wave May Have an "Industry-Leading" DMD Treatment
Wave currently has four drugs in development, but I'll focus on WVE-N531. This drug aims to treat Duchenne Muscular Dystrophy (DMD), a condition that mostly affects young boys. The drug is currently in Phase 2 Food and Drug Administration (FDA) trials.
DMD is characterized by low levels of dystrophin production. One of the main ways to increase dystrophin production is through "exon skipping." These drugs help the body skip over malfunctioning parts of the genetic code (exons) that cause low dystrophin levels. By skipping over these exons, the body should produce more dystrophin. Wave's drug specifically aims to skip over exon 53.
In the company's preclinical trials, the drug achieved exon skipping levels of 53%. The firm says this ...
